Microsoft named world's second most valuable brand

Nov 06, 2014

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Microsoft has been named the world's second most valuable brand, according to a report by Forbes based on earnings and industry relevance.

The valuation placed Microsoft at a worth of $63 billion, a hefty price due in part to its jumping mobile and tablet sales, as well as its sponsorship deals with organizations like the NFL (a deal worth over $400 million). Forbes rated the brand based on its past three years of business operations, which marked an increase in various sectors over the three previous years.

The company reported $23.2 billion in revenue and $5.48 billion in operating income during the three-month period ending September 30th of its 15th fiscal year. In the same report, Microsoft noted a major jump in mobile sales, largely due to its acquisition of the Nokia brand.

Despite these earnings, Microsoft still took a back seat in Forbes' report to Apple, which headed up the list as the world's most valuable brand. Forbes valued Apple at $124.2 billion - nearly double Microsoft - not only due to its product sales numbering in the tens of millions, but also due to its large brand relevance and credibility across the world.

Those wondering why branding factors so much into valuation should look no further than tech startups like Snapchat, which received a $10 billion valuation from Yahoo! last month despite no income flow. With non-traditional companies in the tech world becoming much more dominant, investors will continue to place more emphasis on branding as opposed to financial figures - though no other company will come close to Microsoft in terms of industry dominance.